Early Warning Alert Updates

Radar DollarsCopyright: andreus / 123RF Stock Photo

Welcome to the Index ETF Early Warning Alerts (Soon to be Market Action Points) Update 

July UpdateSince introduced in 2014 the Early Warning Alert system has done an excellent job of identifying major market reversal points.  The last trigger was on March 28th and resulted in a gain of 8% if held for 30 calendar days.  Thus far in 2018, the two triggers have resulted in a gain of 40% for a holding period of 30 calendar days.   Backtesting over 15 years of price action showed that a hold period of 30 calendar days was optimum if entries were strictly based on certain proprietary criteria.  This approach provided excellent entry opportunities close to major market turning points. 

Some of the side effects of the current trigger criteria have been whipsaw and 10% plus drawdowns.  Another area of needed enhancement became evident with the outlier year of 2017.  Only one trigger fired for the whole year.  Past years had always yielded 3 triggers or more.  While there was only one major trigger for 2017 there were multiple solid technical signals.  Secondary minor triggers were not considered with the initial backtesting of the EWA system.  These minor action points yield about 2-3% on the IWM before a technical sell signal is triggered. 

In order to take advantage of the opportunities the market is presenting, I have begun work on a system that captures the major market turning points, like the EWA, but also reduces whipsaw and increases overall performance by incorporating targeted technical signals. Because the new system will provide signals for both major and minor action points, the new service name of Market Action Points fits.  Beginning in September the EWA service will transition into Market Action Points (MAPs) so that members can experience the enhancements first hand, before the general public.

Backtesting of the same timeframe used originally for the Early Warning Alerts is well underway and will be complete in August.  Initial results are showing that MAPs is successful in reducing the instance of whipsaw.  Exits bases on objective technical signals are improving gains and, in some cases, capturing more of the larger, long-term moves.

We are excited about the possibilities that MAPs will bring for simple trading signals, and multiplied profits. Stay tuned in the coming weeks as we finalize the details of this updated service.  Warmest Regard, looking forward to a great future!  Dennis

Performance with 22 trading day holding:  Going into 2018 we highlighted that the back tested hold period of between 20-22 days provided the best results long term.  This equates to holding for a month.  The follow tables reflects current results if held for this time period.  In 2018 we left trade management to each member.  Many members applied their own exit rules and actually outperformed these results.  Again EWA provided excellent triggers!


This video highlights the Optimization of the EWA Timing Service for 2017 & 2018 : Click Here

Focused on providing alert timing for non-leveraged and leveraged Index ETFs:  SPY, QQQ, IWM, SPXL, UPRO, TQQQ & TNA.  There may be occasional focus on the inverse Index ETF’s when market condition favor downside movement.  Our objective is to provide a timing signal alert within 1-15 days of the Standby Alert and then close the long position 20 trading days after entry.  In 2016 as it did in 2015, the Early Warning Alerts triggered either standby slightly before or on the day of the Index’s Swing Low.  The follow up trade trigger took place within 1-5 days of the initial standby alert.

Hi Mike and Dennis,
     I was reviewing my year to date for Early alert trading and it’s up 21% for the year. It is a small account that started with a little over 12K, but I traded with the alerts when I was comfortable and had a positive results. Thank you both.

(These back test results are not a promise nor guarantee of future returns nor a recommendation to trade.  The Alerts and Triggers are provided showing when we enter our own trades.  Each member is responsible for their own risk management.)